Dax buyers trap from Aug the 25th 2021

Date : 08.25.2021
Instrument : Dax CFD

I want to show you another trap that just happened today (at the time I’m writing this article) on the Dax. This time it’s a buyer trap.

I will repeat some stuff there because there’s nothing really in this trap compared to the usual traps. It uses fake trend line, fake horizontal support/resistance retest and a bigger move to induce. That’s all.

Let’s explain a bit more what happened on the chart:

1. A micro up trend line has been created before London open. Look at the wicks alignement, it’s not random.
2. There was bigger up move at London open to induce more buyers. But the most important to notice here is what people don’t really see. This up move was a very high probability move because you have several interesting confluence to trap the buyers and take some sellers stops there (see the next paragraph for more details).
3. They induced more buyers (retracement buyers) with a fake resistance zone becoming support + a new up trend line.

Then the real move down happened. Buyers are KO.

Why the up move at London open was a high probability move?

You have several liquidity zones grabbed with this move + several breakout from zones + a major trend line. More information on the chart below:

As usual, I hope you enjoy these explanations and you learn something from it.

Happy trading!